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A gender gap at every pay grade

How low wages in the retail industry disproportionally hurt women

Alongside the everyday low prices, Walmart shoppers in Landover Hills, Maryland, might encounter Gail Todd. A mother of three who works there as a sales associate, Gail would like to work full time but has recently seen her schedule cut to as few as 12 hours a week. She has no idea how much she’ll end up making this year; even when she was working closer to full time, she expected to bring home just $17,000. Currently she and her family depend on D.C.’s public health care system, food stamps and low-income housing to stay afloat.

Gail’s dilemma is the norm among retail workers. Retail salesperson is the most common job in the country, and the industry’s low pay and erratic scheduling leaves employees — especially the 7.2 million women who disproportionately fill these low-wage jobs — in poverty. The national discussion on the gender pay gap has focused on high-level executives such as Jill Abramson, but inequality in pay is not limited to America’s C-suites. In fact, the retail industry has a big gender pay gap. The typical retail salesman brings home $14.62 an hour, while the typical retail saleswoman earns just $10.58 an hour. Overall in sales and related occupations, the pay gap is costing women $40.8 billion in wages a year.

Nearly 1 in 3 women working part time in retail is an involuntary part-timer seeking full-time employment. But even full-time status is not always a guarantee that workers will be scheduled for the hours they need each week. Low wages and unpredictable schedules have far-reaching consequences. Inconsistent scheduling means workers cannot budget their time or money effectively and prevents them from scheduling classes that could help them qualify for better jobs. Working moms juggling child care are put in an impossible position when they or their children get sick; 19 percent of working mothers reported being fired because they stayed home to take care of themselves or a sick child. Children of low-income parents are six times as likely to drop out of school than children in higher-income families, they are more likely to take on responsibilities of parenting a younger sibling, and they are more likely to become parents in their teen years. The result is deeply entrenched inequality and limited opportunity passed down from one generation to the next.

Scheduling limits

Improving schedules and raising wages in the retail industry can help turn things around for women. Handing out work schedules farther in advance, guaranteeing employees a consistent number of hours each week and providing opportunities for women to swap shifts would enable more women in retail to work their way out of poverty while having important advantages for retailers. Consistent and predictable scheduling would increase productivity and sales and reduce absenteeism and staff turnover.

We can’t talk about poverty among retail saleswomen without talking about the poverty wages they’re paid.

But erratic scheduling is only part of the problem. We can’t talk about poverty among retail saleswomen without taking about the poverty wages they’re paid. In my new Demos study, Retail’s Choice, I find that if the nation’s largest retailers increased wages to a modest $25,000 a year for full-time work, 437,000 working women would move out of poverty or near poverty. Incomes would rise for more than 3.2 million households fully or partly supported by a woman working in the retail industry. Women make up less than half of all retail workers but 55.4 percent of retail’s low-wage workers.

Since low-income households are more likely to spend their additional income than their wealthier counterparts, setting a wage floor of $25,000 for women retail workers would have ripple effects throughout the economy. Putting more money in these workers’ pockets would boost GDP by $6.9 billion to $8.9 billion and create more than 100,000 jobs.

Doomsday predictions

And don’t let the tired corporate doomsday predictions fool you. Paying workers fairly would not force price increases for customers. The increased payroll costs to large retailers would amount to less than 1 percent of the sector’s annual sales, and the costs would be offset by the benefits: Worker productivity increases with better pay, customer service is enhanced, and employee turnover drops as economic security improves. Much of workers’ additional spending would come back to retailers, anyway, producing an estimated additional $4 billion to $5 billion in revenue over the coming year. Even if retailers passed half the cost of raises to their customers, the average household would pay just 15 cents more per shopping trip — a small price to pay to ensure that 7.2 million working women and their families can make ends meet.

Retail certainly isn’t the only industry plagued by low wages, unstable schedules, and troubling gender disparities. But it is one of the nation’s largest and fastest-growing industries, and if present trends continue, there will be 4.1 million women working in low-paid retail jobs by 2022 — more than the entire population of Los Angeles. The result will be more families in living in poverty, higher costs for taxpayers as workers are forced to use public assistance to survive, growing inequality and a continued drag on economic growth. But the retail industry (and the lawmakers who set policy for retail and other low-paying industries) can make a different choice. Retailers can pay wages and offer hours and stable schedules that enable women like Gail Todd to support their families, for a very modest price tag.